GDS

American Airlines’ roll-out of a new bundled fare structure this week has created some confusion among frequent fliers about what the change means to the way they book tickets. They have nothing to worry about — at least for now. American is not changing the decades-long practice of how fares are published on an airline tariff, and fears of a lack of transparency are misplaced.

You can still see in which booking class your ticket will be issued, though it’s indeed a bit confusing how exactly one would know the difference between the three new fare types by looking at that booking class, which could be the same for all three fares. So let’s break all this down and try to make sense of it.

First, what has American changed? It has bundled products and services that airlines have been unbundling for a few years, though some of those extras like certain seats are still sold separately. When you search domestic fares in the contiguous 48 states on its website, you now get three tabs: lowest fare, refundable (both coach) and Business/First Class. The default tab is lowest fare. In that category, there are three types of fares, as shown below for a one-way trip from Washington to Los Angeles…

The travel-agency community has been fuming for years over its inability to sell airline products that used to be included in ticket prices but no longer are, and with good reason. A travel agent’s value is diminished by such a significant limitation. The airlines, in turn, refuse to make those products available through distribution channels they don’t control because of high costs. So what’s the solution?

According to the American Society of Travel Agents, the answer is government regulation. “The airline marketplace is simply not working,” the organization’s senior vice president, Paul Ruden, wrote today on its website. Even though the Department of Transportation (DOT) is considering mandatory disclosure of extra fees for seat assignments, luggage, premium economy seats, etc., it’s unlikely it will force the airlines to sell those products through the currently dominant third-party distribution channels.

Let’s look at the problem through each player’s prism. If you use a travel agency — traditional or online — you expect full service. You don’t want to be told that your agent can only issue a ticket, but for anything else you need to buy, you have to go to the airline’s website. Then why would you want to pay an agent to book your travel? The other option is for the agent to go on the airline website and make those additional purchases, but that would take more time, and the agency would make no commission. Naturally, agents prefer to accomplish all their transactions in one place, and to get paid for what they sell — that place is a third-party Global Distribution System (GDS)…

North American airfares are now published four times a day during the week, after the Airline Tariff Publishing Company (ATPCO) added earlier this month a filing feed at 4 p.m. Eastern time to the already-existing feeds at 10 a.m., 1 p.m. and 8 p.m.

This means that, at any of those times, a certain fare can be put on the market, changed or pulled off the market. It also means that a fare’s entire lifespan can be as short as three hours. The 4 p.m. feed had been planned for months, as I wrote in my book “Decoding Air Travel.” Although the airlines update their data 24 hours a day, ATPCO sends that data out to Global Distribution Systems (GDS), which are used by airlines and travel agencies to book flights, four times a day during the week. On weekends, there is only one feed at 5 p.m. ET…

When was the last time you used a travel agent? I asked that question in my book “Decoding Air Travel.” Last month, President Obama asked it, too, and the American Society of Travel Agents speedily protested. So let’s examine the modern — or perhaps not modern enough — travel-agency system and the value it brings.

Many young people don’t even remember the time when using a travel agent was the only practical way to book a trip. While many consumers today book their own travel, using travel agencies is still quite prevalent in the corporate world. However, many business travelers I know are unhappy with their company’s travel agency. It’s clear the current system isn’t working well anymore for a variety of reasons. Without taking sides, let’s look at those reasons from the perspective of travel agencies and their customers…

One of this column’s goals is to point out nuisances in the air travel system and help you avoid them or minimize their negative impact. As I welcome the many readers who have become subscribers since my book, “Decoding Air Travel,” came out, I’d like to tell you about one such nuisance.

As my regular readers are well aware by now, I always know in what booking class a future ticket will be issued. I search for availability in that booking class and choose flights with available seats. That’s why, even if I have to make a reservations with an agent on the phone, I know how much the ticket will cost before I make the call…

American Airlines has been trying to cut booking costs by fighting to reduce the power of the Global Distribution Systems (GDS) — and the high fees they charge. However, its own ticketing process remains surprisingly outdated for one of the world’s largest carriers, and far from being cost-efficient.

It wouldn’t be difficult for American to save millions of dollars a year. All it needs to do is implement instant ticketing, which most other major airlines have had for years. The carrier says it plans to introduce instant ticketing on its website later this year, but it has no intention to allow phone reservation agents to issue tickets at this time…

One by one, airlines are waking up to the sobering reality of the modern Global Distribution System (GDS) model, which they created decades ago. Two carriers have now taken legal action, and this is only the beginning. If more airlines want to see changes and lower costs, they should join forces instead of watching from the sidelines.

Judge Miriam Goldman Cedarbaum of the United States District Court for the Southern District of New York is about to become an expert on airline data distribution — in the 82nd year of her life. You can see her name stamped on a complaint (pictured above) filed last week by US Airways against Sabre, the largest GDS in the United States…

The new airline data distribution model I predicted in February has just become a reality. Expedia, the most popular online travel agency, agreed this week to carry American Airlines data hosted by the carrier’s “Direct Connect” channel. Expedia’s consolation prize is that it will use Global Distribution System (GDS) aggregation technology.

Since Dec. 31, when its contract with American expired and it decided not to renew it, Expedia had been resisting the airline’s attempts to move to a direct channel. Why? Because it wanted to continue to receive sizable kickbacks from Sabre, the GDS it uses to display and book flights. American insists on “Direct Connect” for two reasons…

Don’t be afraid — this is the message I have for travelers who may be concerned about losing the ability for comparison-shopping because of the war between American Airlines and online travel agencies. The longtime Global Distribution Systems (GDS) model is about to change, and many people stand to lose lots of money. That’s why they are trying to scare you.

For decades, the GDS model has been the norm for distributing airline data and booking flights, which has given the three main GDS companies in the world — Sabre, Amadeus and Travelport — enormous power. You might have heard that American was on Sabre and United on Apollo, which is now part of Traveport…

As if the existing methods to overcharge travelers weren’t enough, some airlines have just found a new way deeper into your pockets. It comes in the form of sophisticated software designed to increase prices based on your desperation and lack of choice. Will you fall for the latest gimmick?

The new application is courtesy of Amadeus, one of the major distributors of airline and other travel-related data worldwide. This week, it announced the launch of “Active Valuation,” an “IT solution that enables airlines to maximize revenues across multiple channels,” or to charge you more for something you can otherwise get at a lower price…